The Branch Manager,Laxmi Vilas Bank Ltd.. V/S Dr.Jyothilaxmi Patil, - Consumer Court Case

Karnataka

Raichur

DCFR 24/08

Dr.Jyothilaxmi Patil, - Complainant(s)

Versus

The Branch Manager,Laxmi Vilas Bank Ltd.. - Opp.Party(s)

H.Meenappa Rao,

24 Nov 2008

ORDER

DIST. CONSUMER DISPUTES REDRESSAL FORUM
DIST. CONSUMER DISPUTES REDRESSAL FORUM,DC Office Compound, Sath Kacheri
consumer case(CC) No. DCFR 24/08

Dr.Jyothilaxmi Patil,						...........Appellant(s)
Vs.
The Branch Manager,Laxmi Vilas Bank Ltd.. The Managing Director, Head Office. Laxmi Vilas Bank Ltd.						...........Respondent(s)

BEFORE:

Complainant(s)/Appellant(s):

OppositeParty/Respondent(s):

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ORDER

By Sri. N.H. Savalagi President:- This is a complaint filed U/s. 12 of Consumer Protection Act by the complainant- Jytohi Lakshmi Patil against the two Respondents- (1) Branch Manager Laxmi Vilas Bank Limited Raichur (2) Managing Director Head Office, Laxmi Vilas Bank Limited Karur Tamil Nadu. The brief facts of the complaint are as under: The complainant is an Ayurvedic Doctor by profession and has started her own clinic under the name & style as M/s. Bhoomi Ayur Point at Mala Complex Beroonquilla, Raichur. The husband of the complainant is also Managing the same clinic. Out of their earnings, both complainant & her husband have deposited their amount with Respondent NO-1 under Fixed Deposit as under: Sl.No. FDR No. Name Amount Date 1) 20030846 Jyothilaxmi Patil Rs. 50,000/- 20-01-05. 2) 20050044 M.Hemanthkumar Rs. 50,000/- 03-01-06. 3) 20030022 Jyothilaxmi Patil Rs. 50,000/- 20-12-05. 4) 20050030 -do- Rs. 50,000/- 21-12-05. 5) 20050038 -do- Rs. 50,000/- 29-12-05. 6) 20050032 Hemanthkumar Rs. 50,000/- 23-12-05. In all Rs. Three Lakh was deposited in the Respondent No-1 Bank. Then the Branch Manager of the Respondent Bank requested the complainant to obtain loan in-order to avail the payment of Income Tax. The complainant in good faith raised the loan in a sum of Rs. 2,25,000/- by way of over draft facility on 21-02-06. The rate of interest was fixed at 8.25% p.a. against the security of their FDs with the Bank. Though the loan of Rs. 2,25,000/- was sanctioned but the complainant has availed/drawn in all sum of Rs. 1,55,000/- on various dates as mentioned below: Sl.No. Cheque No. Amount Date. 1) 227551 Rs. 25,000/- 25-05-2006. 2) 227552 Rs. 50,000/- 08-06-2006. 3) 227553 Rs. 25,000/- 14-08-2006. 4) 227554 Rs. 25,000/- 23-03-2007. 5) 227555 Rs. 10,000/- 05-04-2007. 6) 227556 Rs. 20,000/- 23-06-2007. ---------------- Total Rs. 1,55,000/- ---------------- The complainant after obtaining the loan has made repayments totaling to Rs. 41,970/- on different dates as shown below: Sl.No. Amount Date 1) 05470-00 08-04-06. 2) 05500-00 06-05-06. 3) 05000-00 08-06-06. 4) 26000-00 06-07-06. ------------- Total 41,970-00 ------------- As there was no demands for Ayurvedic Doctors in Raichur Town, the complainant has faced much loss. Therefore she has joined in BVVS Ayurvedic Medical College at Baglokot and working as Assistant Professor in the said college. During August-2006 to December-2007 the financial condition of the complainant was very bad. The present Branch Manger of the Respondent No-1 Bank without notice and without consent of the complainant has forfeited the FD amount of Rs. 2,50,000/- and adjusted the same to the loan amount of the complainant in the month of January-2008 by imposing interest at 9.25% as against 8.25% and thereby 1% excess interest & compound interest has been charged illegally. The complainant is a highly qualified post graduate doctor and visited the Respondent No-1 Bank on 14-01-08 & 1-01-08. The present Manager without any humanity has started to abuse the complainant and even was not ready to furnish details of Statement of Account on enquiry with other staff of the Bank complainant was told that the present Manager is a short tampered man and in a hurry manner has closed the account by imposing excess interest amount and penal interest. Once again on 18-02-08 the complainant visited the Branch office of Respondent NO-1 at about 11-00 AM. She was asked to sit and wait upto 2-00 PM then and again she has been asked to come by 3-00 PM and then again the complainant visited the bank and waited upto 4-00 PM. The Branch Manager in the presence of the staff and customers, has started to abuse the complainant and insulted her and finally he gave Xerox copy of the some paper to the complainant. This attitude and misbehavior of the Branch Manager of the Respondent No-1 Bank hurt the feelings of the complainant. Respondent No-1 without knowledge and consent of the complainant has also closed her FD A/c. and excess interest amount and penal interest has been imposed on loan amount which is against the provisions of law and it amounts to unfair trade practice and deficiency in service on the part of the Respondent No-1 Bank. Respondent NO-2 is the Head office of the Respondent NO-1 Bank. So both are jointly and severally liable to pay sum of Rs. 80,000/- towards loss ,damages to the complainant. Hence for all these reasons the complainant has sought for direction to refund of the amount with deducted & imposed excess interest of 1% and penal interest on FDs and has also sought for direction to pay sum of Rs. 80,000/- towards loss damages and compensation for deficiency in service and unfair trade practice and to award cost of the proceedings. 2. Respondent NO-1 & 2 appeared through counsel and Respondent No-1 filed written version which has been adopted by Respondent No-2. In the written version it is contended that the FDs have been made with different styles of names i.e, FD dt. 20-01-05 has been styled as M/s. Jyothi Lakshmi, FD dt. 20-12-05 with deposit No. 20050028 is in the style of Jyothi Laxmi Patil, the FD dt. 22-12-05 with No. 20050030 is in the name and style as Mrs. J.Patil the FD dt. 30-12-05 bearing No. 20050038 is in the name and style as J.L. Patil. The rest of the two FDs dt. 04-01-06 bearing No. 20050044 is in the name of Mrs. H.Kumar and the another FD dt. 24-12-05 bearing No. 20050032 is in the name and style as Mrs. Hemanth Kumar.M. In order to avoid Income Tax the complainant has intentionally opened the FD accounts in different styles and names. The contention of the complainant that the then Branch Manager requested the complainant to obtain loan in order to avail the payment of Income Tax etc., are all false and baseless hence denied. The rate of interest was fixed at Rs. 8.5% p.a. but it was agreed that the rates may be varied by the bank from time to time and the complainant has accepted the variation rate of interest. Further the contention of the complainant that Branch Manager has taken signatures of the complainant on number of blank papers are all false and baseless. The complainant is highly educated and she is capable of understanding all the procedures. The complainant is making such false allegations in order to suit her illegal claim. Apart from drawing the loan amount as mentioned in Para- 4 of her complaint, the complainant has also drawn Rs. 25,000/- on 21-07-07. So she was due in a sum of Rs. 1,52,682.18 ps as on 31-12-07 to the Respondent No.1 Bank. The contents of Para-5 of the complaint regarding same payments made by her is admitted. The five Fixed Deposit receipts which have been offered/pledged as security were matured but the complainant did not opt for renewal of the same. Therefore Respondent No-1 Bank left with no other option was constrained to credit the proceeds of the said FD receipts in her S.B. account and adjusted the sum of Rs. 1,55,000/- on 14-01-08 to the OD account. The Respondent NO-1 Bank has acted as per law and agreed terms. The rate of interest prevalent was 9.25% p.a. and therefore the Respondent No-1 Bank has charged the interest at 9.25% from 01-02-07 compoundable with quarterly rests as agreed by her. The complainant in order to harass and cause loss to the bank as made false and baseless allegations. The complainant has cooked up a false case in order to suit her illegal claims. The Manager of the Respondent No-1 Bank has informed the complainant about the procedure and requested her to be clam. Instead of that the complainant herself got enraised and started shouting at the manger. Thus the atmosphere of the bank was disturbed. The Manger of the Respondent Bank has acted responsibly and as per the law. Respondent No-1 had every right to exercise his option of adjusting the proceeds of FDRs on the loan account. As stated above those FDRs were matured and the complainant did not opt for renewal and as OD account was in operative, consequently it became due and therefore Respondent Bank was constrained to adjust the proceeds to the loan account by charging the interest as per law. Hence there is no deficiency or unfair trade practice on the part of the Respondent NO-1. No cause of action has accrued to the complainant to file this complainant. After closure of the FDs complainant has requested to make fresh FDs out of remaining proceeds, and the proceeds of another FD in her name in different styles of names as they were earlier. But the Respondent No-1 declined to do so as it cannot be done and the account can be opened in one style of name only in order to avoid violation of Income Tax Rules etc., But the complainant persisted to open the FDRs in different styles of names in order to avoid Income Tax deducted at source. Therefore the Respondent No-1 did not oblige for such unfair demand of the complainant. At the time of opening of FDRs the rate of interest was 7.5% pa. and subsequently it was raised to 8.25% p.a. and accordingly Respondent No-1 was also constrained to increase the rate of interest on the OD facility availed as per banking norms and procedures. Always lending rate will be more than the rate of interest given on FDRs. Therefore there is no deficiency in service on the part of the Respondent Bank and hence for all these reasons they have sought for dismissal of the complaint with cost. 3. During the course of enquiry the complainant has filed her sworn affidavit by way of examination-in-chief reiterating the contents of the complaint. Similarly the Respondent has filed his sworn affidavit on 13-08-08 by way of examination-in-chief reiterating the contents of the written version as RW-1. On 09-09-08 the Respondent No-1 has filed affidavit of A. Rama Rao the then Manager of Respondent No-1 Bank working during the relevant period by way of examination in chief as RW-2. On behalf of complainant (3) documents were got marked as Ex.P-1 to Ex.P-3. Similarly (3) documents have been got marked at Ex.R-1 & Ex.R-3 for Respondent. 4. Heard the arguments of both sides and perused the records. The following points arise for our consideration and determination: 1. Whether the complainant proves deficiency in service and unfair trade practice by Respondent Bank, as alleged.? 2. Whether the complainant is entitled for the reliefs sought for.? 5. Our finding on the above points are as under:- 1. In the Negative. 2. As per final order for the following REASONS POINT NO.1:- 6. There is no dispute that the complainant was sanctioned a loan of Rs. 2,25,000/- under S.O.D. facility on 21-02-06 on security of (6) FDRs in all Three Lakh. It is also not in dispute that the rate of interest was fixed at Rs. 8.25% p.a. According to the complainant out of sanctioned loan of Rs. 2,25,000/- she has drawn/availed the loan in all Rs. 1,55,000/- on different dates as detailed in Para-4 of her complaint and she has made repayments on (4) different dates in all Rs. 41,970/- as detailed in Para-5 of her complaint. According to the Respondent-Bank, in-addition to availed loan of Rs. 1,55,000/- the complainant has also drawn/availed loan amount Rs. 25,000/- on 21-07-07 out of sanctioned loan of Rs. 2,25,000/- and the complainant is due in a sum of Rs. 1,52,682.18 ps as on 31-12-07 to the Respondent Bank. It is the case of the complainant that the Manager of Respondent Bank without notice and without her consent has forfeited her FD amount in all Rs. 2,50,000/- and adjusted the same to her loan A/c in the month of January-2008 by imposing interest at 9.25% as against 8.25% and thereby 1% excess interest and compound interest has been charged illegally. The Respondent Bank contend that the (5) FDRs which have been offered as security were matured and since the complainant did not opt for renewal of the same, so the Respondent Bank left with no other option to credit the proceeds of the said FDR in her SB account and then adjusted a sum of Rs. 1,55,000/- on 14-01-08 to the OD account as per law and agreed terms. The rate of interest prevalent was 9.25% p.a. and the said rate of interest has been charged from 01-02-07 compoundable with quarterly rests as agreed by the complainant. The complainant has cooked up false case in-order to suit her illegal claims, harass and to cause loss to Respondent Bank. 7. The complainant has produced (3) documents at Ex.P-1 to Ex.P-3 viz., Ex.P-1 is the Xerox copy of Loan Application For Financial Assistance/Loan against Security of Term Deposit. Ex.P-2 is the Xerox copy of Statement of Account for the period from 04-07-07 to 19-02-08. Ex.P-3 is the Statement of Account for the period from 21-02-06 to 04-07-07 pertaining to the complainant. The Respondents have also produced (3) documents at Ex.R-1 to Ex.R-3. Ex.R-1 is the Extract of S.B. Account of the complainant. Ex.R-2 is the Extract of Account of the complainant, Ex.R-3 is the Xerox copy of FDR No. 053880. 8. Both the parties have not produced Loan Agreement showing the terms and conditions of loan sanctioned regarding charging of interest and mode of repayment. Even the complainant has not applied for calling for the same from Respondent Bank. However Ex.P-1 Loan Application, a perusal of which shows incorporation of loan agreement and signatures of the complainant below this Agreement on page No-2 of this loan application, we find loan agreement starting with the opening sentence as: In consideration of the grant or continuation of the facilities to the depositor/s and or the third party I/we agree with the bank as follows. This agreement shows in all (11) Paras of terms and conditions and the last i.e, 11th para reads as under:- Not withstanding any thing to the contrary contained herein or in any agreement or otherwise it is specifically agreed that you shall always be entitled to have your right of general lien/set off on the above deposit(s) against any of my/our liability as borrower or guarantor. The lien hereby created shall not in any way affect or prejudice your lien which you shall always be entitled to exercise. Sd/- Sd/- Sd/- J.Patil Jyothi Laxmi Jyothi Laxmi Patil Sd/- Sd/- Sd/- H.Kumar J.L.Patil Hemantkumar.M. ----------------------------------------------------------- Signature of the depositor/s Ex.P-2 is the statement of Accounts for the period from 04-07-07 to 19-02-08 showing the total debit amount at Rs. 1,53,859.60 Ps and total credit amount at Rs. 1,55,000/- and the closing balance at Rs. 1,140.31 Ps. Ex.P-3 is the another Statement of Account pertaining to SOD for the period from 21-02-06 to 04-07-07 showing the repayment of loan of Rs. 41,970/- and balance at Rs. 1,20,528/- as on 30-06-07. 9. The Respondent Bank has produced (3) documents at Ex.R-1 to Ex.R-3. Ex.R-1 is the statement of Account of SOD of the complainant for the period from 21-02-06 to 04-07-07. This statement shows withdrawal of loan amount out of sanctioned loan as on (6) different occasion right from 25-02-06 to 23-06-07 and also regarding repayment of part of the loan amount at Rs. 41,970/- on (4) different dates right from 08-04-06 to 06-07-06 it tallies with the contents of complaint at Para- 4 & 5 of the complaint regarding withdrawal of loan amount and repayment of loan. Ex.R-2 is the statement of accounts of SOD pertaining to the complainant showing the withdrawal of Rs. 25,000/- out of sanctioned loan amount on 21-07-07 as contended in Para-5 of the written statement. Ex.R-3 is the photo copy of FDR No. 20030846 dt. 20-01-05 for Rs. 50,000/- invested for (12) months rate of interest at 6.75%. 10. From the material on record it shows that the complainant has withdraw/availed Rs. 1,55,000/- as contended by her in Para-4 of the complaint and in-addition to that she has also withdrawn further loan Rs. 25,000/- on 21-07-07 as contended by the Respondents in Para-5 of the written version. Thus the complainant has availed a loan of Rs. 1,80,000/- out of sanctioned loan of Rs. 2,25,000/-. It also shows that the complainant has made repayments of Rs. 41,970/- only for (4) months from April 2006 to July 2006 as stated in Para-5 of her complaint and as could be seen from Statement of Account. Except this repayment of Rs. 41,970/- she has not made any repayments of loan availed by her. 11. Admittedly the loan was obtained on security of (6) FDRs of 50,000/- each as seen in Para-2 of the complaint. The loan application Ex.P-1 also shows the security deposit of FDRs. Out of (6) FDRs, (5) FDRs at Sl.No-1 & 3 to 6 as shown in the loan application Ex.P-1 are of 2005 and the 2nd FDR is of 2006. It further shows that the FDR at Sl.No- 1 & 2 were to be matured in January-2007 whereas the other (4) FDRs were to be matured in December-2006. So it follows that the SOD loan availed by the complainant was to be repaid within the maturity period of FDRs and it appears that for the first four months the complainant was regular in repayment of loan and thereafter there was no repayment of loan amount by her. As stated earlier Ex.P-1 also incorporates the loan agreement. According to Para-4 of the loan agreement, the complainant/loanee has authorized the Respondent-Bank to apply the proceeds of the deposits/FDRs on their due dates towards adjustment of advance including interest charges thereon. According to Para-5 of the agreement, if the said FDs deposits are renewed on the due dates or before their maturity such renewed deposit shall be held as a continuing security for the outstanding account including interest etc., 12. It is not the case of the complainant that (6) FDRs have been renewed by her as per Para-5 of the terms and conditions of the agreement or she had given application for renewal of the FDRs. In the absence of the same, the Respondent Bank was justified in adjusting the deposit/FDRs in the loan account on the due dates. Statement of Account shows that the FDRs were adjusted on 14-01-08 for the non-repayment of loan by the complainant from August-2006. Over and above Para-11 of the agreement in Ex.P-1 as reproduced above, it states that the depositors/complainant had agreed and authorized Respondent Bank to have their right of general lien/set off on the FDRs against her liability as borrower or guarantor. So the contention of the complainant that the Respondent Bank without intimation has adjusted FDRs in the loan account does not stand to reason. 13. The complainant has nextly contended that the Respondent Bank has illegally charged high rate of interest. The Respondent in their written statement have contended that they have charged 1% interest on the loan amount in excess to the rate of interest given on the FDRs. Interest on FDRs was fixed at Rs. 8.5% p.a. and it was also agreed that the rates may be varied from the bank from time to time. The prevalent interest was at 9.25% and therefore the Respondent Bank has charged the interest at 9.25% p.a. from 01-02-07 compoundable with quarterly rests as agreed by the complainant. Ex.P-1 shows that initially the interest on the loan was at 8.25% and subsequently it was raised to 9.25% so we do not find substance in this contention also. As stated supra the complainant/borrower has not repaid the loan after August-2006 and the FDRs/deposited by her were not renewed and so after the maturity of the FDRS the Respondent Bank has adjusted the proceeds of the FDRs in the loan amount with interest. Under these circumstances the Respondent Bank cannot be said to be deficient in service or unfair trade practice as contended by the complainant. Therefore we hold that the complainant has failed to prove point No-1 and so Point NO-1 is answered in the negative. POINT NO.2:- 14 In view of our discussions and finding on point No-1, holding that the complainant has failed to prove deficiency in service and unfair trade practice on the part of the Respondent Bank, therefore the complainant is not entitled for the reliefs sought for. In this view of the matter we pass the following order: ORDER The complaint of the complainant being devoid of merits is hereby dismissed . No order as to cost. Office to furnish certified copy of this order to both the parties forth with free of cost. (Dictated to the Stenographer, typed, corrected and then pronounced in the open Forum on 24-11-08) Sd/- Sri. N.H. Savalagi President Dist.Consumer Forum-Raichur. Sd/- Sri. Gururaj Member. Dist.Consumer Forum-Raichur. Sd/- Smt.Pratibha Rani Hiremath Member. Dist.Consumer Forum-Raichur.

By Sri. N.H. Savalagi President:- This is a complaint filed U/s. 12 of Consumer Protection Act by the complainant- Jytohi Lakshmi Patil against the two Respondents- (1) Branch Manager Laxmi Vilas Bank Limited Raichur (2) Managing Director Head Office, Laxmi Vilas Bank Limited Karur Tamil Nadu. The brief facts of the complaint are as under: The complainant is an Ayurvedic Doctor by profession and has started her own clinic under the name & style as M/s. Bhoomi Ayur Point at Mala Complex Beroonquilla, Raichur. The husband of the complainant is also Managing the same clinic. Out of their earnings, both complainant & her husband have deposited their amount with Respondent NO-1 under Fixed Deposit as under: Sl.No. FDR No. Name Amount Date 1) 20030846 Jyothilaxmi Patil Rs. 50,000/- 20-01-05. 2) 20050044 M.Hemanthkumar Rs. 50,000/- 03-01-06. 3) 20030022 Jyothilaxmi Patil Rs. 50,000/- 20-12-05. 4) 20050030 -do- Rs. 50,000/- 21-12-05. 5) 20050038 -do- Rs. 50,000/- 29-12-05. 6) 20050032 Hemanthkumar Rs. 50,000/- 23-12-05. In all Rs. Three Lakh was deposited in the Respondent No-1 Bank. Then the Branch Manager of the Respondent Bank requested the complainant to obtain loan in-order to avail the payment of Income Tax. The complainant in good faith raised the loan in a sum of Rs. 2,25,000/- by way of over draft facility on 21-02-06. The rate of interest was fixed at 8.25% p.a. against the security of their FDs with the Bank. Though the loan of Rs. 2,25,000/- was sanctioned but the complainant has availed/drawn in all sum of Rs. 1,55,000/- on various dates as mentioned below: Sl.No. Cheque No. Amount Date. 1) 227551 Rs. 25,000/- 25-05-2006. 2) 227552 Rs. 50,000/- 08-06-2006. 3) 227553 Rs. 25,000/- 14-08-2006. 4) 227554 Rs. 25,000/- 23-03-2007. 5) 227555 Rs. 10,000/- 05-04-2007. 6) 227556 Rs. 20,000/- 23-06-2007. ---------------- Total Rs. 1,55,000/- ---------------- The complainant after obtaining the loan has made repayments totaling to Rs. 41,970/- on different dates as shown below: Sl.No. Amount Date 1) 05470-00 08-04-06. 2) 05500-00 06-05-06. 3) 05000-00 08-06-06. 4) 26000-00 06-07-06. ------------- Total 41,970-00 ------------- As there was no demands for Ayurvedic Doctors in Raichur Town, the complainant has faced much loss. Therefore she has joined in BVVS Ayurvedic Medical College at Baglokot and working as Assistant Professor in the said college. During August-2006 to December-2007 the financial condition of the complainant was very bad. The present Branch Manger of the Respondent No-1 Bank without notice and without consent of the complainant has forfeited the FD amount of Rs. 2,50,000/- and adjusted the same to the loan amount of the complainant in the month of January-2008 by imposing interest at 9.25% as against 8.25% and thereby 1% excess interest & compound interest has been charged illegally. The complainant is a highly qualified post graduate doctor and visited the Respondent No-1 Bank on 14-01-08 & 1-01-08. The present Manager without any humanity has started to abuse the complainant and even was not ready to furnish details of Statement of Account on enquiry with other staff of the Bank complainant was told that the present Manager is a short tampered man and in a hurry manner has closed the account by imposing excess interest amount and penal interest. Once again on 18-02-08 the complainant visited the Branch office of Respondent NO-1 at about 11-00 AM. She was asked to sit and wait upto 2-00 PM then and again she has been asked to come by 3-00 PM and then again the complainant visited the bank and waited upto 4-00 PM. The Branch Manager in the presence of the staff and customers, has started to abuse the complainant and insulted her and finally he gave Xerox copy of the some paper to the complainant. This attitude and misbehavior of the Branch Manager of the Respondent No-1 Bank hurt the feelings of the complainant. Respondent No-1 without knowledge and consent of the complainant has also closed her FD A/c. and excess interest amount and penal interest has been imposed on loan amount which is against the provisions of law and it amounts to unfair trade practice and deficiency in service on the part of the Respondent No-1 Bank. Respondent NO-2 is the Head office of the Respondent NO-1 Bank. So both are jointly and severally liable to pay sum of Rs. 80,000/- towards loss ,damages to the complainant. Hence for all these reasons the complainant has sought for direction to refund of the amount with deducted & imposed excess interest of 1% and penal interest on FDs and has also sought for direction to pay sum of Rs. 80,000/- towards loss damages and compensation for deficiency in service and unfair trade practice and to award cost of the proceedings. 2. Respondent NO-1 & 2 appeared through counsel and Respondent No-1 filed written version which has been adopted by Respondent No-2. In the written version it is contended that the FDs have been made with different styles of names i.e, FD dt. 20-01-05 has been styled as M/s. Jyothi Lakshmi, FD dt. 20-12-05 with deposit No. 20050028 is in the style of Jyothi Laxmi Patil, the FD dt. 22-12-05 with No. 20050030 is in the name and style as Mrs. J.Patil the FD dt. 30-12-05 bearing No. 20050038 is in the name and style as J.L. Patil. The rest of the two FDs dt. 04-01-06 bearing No. 20050044 is in the name of Mrs. H.Kumar and the another FD dt. 24-12-05 bearing No. 20050032 is in the name and style as Mrs. Hemanth Kumar.M. In order to avoid Income Tax the complainant has intentionally opened the FD accounts in different styles and names. The contention of the complainant that the then Branch Manager requested the complainant to obtain loan in order to avail the payment of Income Tax etc., are all false and baseless hence denied. The rate of interest was fixed at Rs. 8.5% p.a. but it was agreed that the rates may be varied by the bank from time to time and the complainant has accepted the variation rate of interest. Further the contention of the complainant that Branch Manager has taken signatures of the complainant on number of blank papers are all false and baseless. The complainant is highly educated and she is capable of understanding all the procedures. The complainant is making such false allegations in order to suit her illegal claim. Apart from drawing the loan amount as mentioned in Para- 4 of her complaint, the complainant has also drawn Rs. 25,000/- on 21-07-07. So she was due in a sum of Rs. 1,52,682.18 ps as on 31-12-07 to the Respondent No.1 Bank. The contents of Para-5 of the complaint regarding same payments made by her is admitted. The five Fixed Deposit receipts which have been offered/pledged as security were matured but the complainant did not opt for renewal of the same. Therefore Respondent No-1 Bank left with no other option was constrained to credit the proceeds of the said FD receipts in her S.B. account and adjusted the sum of Rs. 1,55,000/- on 14-01-08 to the OD account. The Respondent NO-1 Bank has acted as per law and agreed terms. The rate of interest prevalent was 9.25% p.a. and therefore the Respondent No-1 Bank has charged the interest at 9.25% from 01-02-07 compoundable with quarterly rests as agreed by her. The complainant in order to harass and cause loss to the bank as made false and baseless allegations. The complainant has cooked up a false case in order to suit her illegal claims. The Manager of the Respondent No-1 Bank has informed the complainant about the procedure and requested her to be clam. Instead of that the complainant herself got enraised and started shouting at the manger. Thus the atmosphere of the bank was disturbed. The Manger of the Respondent Bank has acted responsibly and as per the law. Respondent No-1 had every right to exercise his option of adjusting the proceeds of FDRs on the loan account. As stated above those FDRs were matured and the complainant did not opt for renewal and as OD account was in operative, consequently it became due and therefore Respondent Bank was constrained to adjust the proceeds to the loan account by charging the interest as per law. Hence there is no deficiency or unfair trade practice on the part of the Respondent NO-1. No cause of action has accrued to the complainant to file this complainant. After closure of the FDs complainant has requested to make fresh FDs out of remaining proceeds, and the proceeds of another FD in her name in different styles of names as they were earlier. But the Respondent No-1 declined to do so as it cannot be done and the account can be opened in one style of name only in order to avoid violation of Income Tax Rules etc., But the complainant persisted to open the FDRs in different styles of names in order to avoid Income Tax deducted at source. Therefore the Respondent No-1 did not oblige for such unfair demand of the complainant. At the time of opening of FDRs the rate of interest was 7.5% pa. and subsequently it was raised to 8.25% p.a. and accordingly Respondent No-1 was also constrained to increase the rate of interest on the OD facility availed as per banking norms and procedures. Always lending rate will be more than the rate of interest given on FDRs. Therefore there is no deficiency in service on the part of the Respondent Bank and hence for all these reasons they have sought for dismissal of the complaint with cost. 3. During the course of enquiry the complainant has filed her sworn affidavit by way of examination-in-chief reiterating the contents of the complaint. Similarly the Respondent has filed his sworn affidavit on 13-08-08 by way of examination-in-chief reiterating the contents of the written version as RW-1. On 09-09-08 the Respondent No-1 has filed affidavit of A. Rama Rao the then Manager of Respondent No-1 Bank working during the relevant period by way of examination in chief as RW-2. On behalf of complainant (3) documents were got marked as Ex.P-1 to Ex.P-3. Similarly (3) documents have been got marked at Ex.R-1 & Ex.R-3 for Respondent. 4. Heard the arguments of both sides and perused the records. The following points arise for our consideration and determination: 1. Whether the complainant proves deficiency in service and unfair trade practice by Respondent Bank, as alleged.? 2. Whether the complainant is entitled for the reliefs sought for.? 5. Our finding on the above points are as under:- 1. In the Negative. 2. As per final order for the following REASONS POINT NO.1:- 6. There is no dispute that the complainant was sanctioned a loan of Rs. 2,25,000/- under S.O.D. facility on 21-02-06 on security of (6) FDRs in all Three Lakh. It is also not in dispute that the rate of interest was fixed at Rs. 8.25% p.a. According to the complainant out of sanctioned loan of Rs. 2,25,000/- she has drawn/availed the loan in all Rs. 1,55,000/- on different dates as detailed in Para-4 of her complaint and she has made repayments on (4) different dates in all Rs. 41,970/- as detailed in Para-5 of her complaint. According to the Respondent-Bank, in-addition to availed loan of Rs. 1,55,000/- the complainant has also drawn/availed loan amount Rs. 25,000/- on 21-07-07 out of sanctioned loan of Rs. 2,25,000/- and the complainant is due in a sum of Rs. 1,52,682.18 ps as on 31-12-07 to the Respondent Bank. It is the case of the complainant that the Manager of Respondent Bank without notice and without her consent has forfeited her FD amount in all Rs. 2,50,000/- and adjusted the same to her loan A/c in the month of January-2008 by imposing interest at 9.25% as against 8.25% and thereby 1% excess interest and compound interest has been charged illegally. The Respondent Bank contend that the (5) FDRs which have been offered as security were matured and since the complainant did not opt for renewal of the same, so the Respondent Bank left with no other option to credit the proceeds of the said FDR in her SB account and then adjusted a sum of Rs. 1,55,000/- on 14-01-08 to the OD account as per law and agreed terms. The rate of interest prevalent was 9.25% p.a. and the said rate of interest has been charged from 01-02-07 compoundable with quarterly rests as agreed by the complainant. The complainant has cooked up false case in-order to suit her illegal claims, harass and to cause loss to Respondent Bank. 7. The complainant has produced (3) documents at Ex.P-1 to Ex.P-3 viz., Ex.P-1 is the Xerox copy of Loan Application For Financial Assistance/Loan against Security of Term Deposit. Ex.P-2 is the Xerox copy of Statement of Account for the period from 04-07-07 to 19-02-08. Ex.P-3 is the Statement of Account for the period from 21-02-06 to 04-07-07 pertaining to the complainant. The Respondents have also produced (3) documents at Ex.R-1 to Ex.R-3. Ex.R-1 is the Extract of S.B. Account of the complainant. Ex.R-2 is the Extract of Account of the complainant, Ex.R-3 is the Xerox copy of FDR No. 053880. 8. Both the parties have not produced Loan Agreement showing the terms and conditions of loan sanctioned regarding charging of interest and mode of repayment. Even the complainant has not applied for calling for the same from Respondent Bank. However Ex.P-1 Loan Application, a perusal of which shows incorporation of loan agreement and signatures of the complainant below this Agreement on page No-2 of this loan application, we find loan agreement starting with the opening sentence as: In consideration of the grant or continuation of the facilities to the depositor/s and or the third party I/we agree with the bank as follows. This agreement shows in all (11) Paras of terms and conditions and the last i.e, 11th para reads as under:- Not withstanding any thing to the contrary contained herein or in any agreement or otherwise it is specifically agreed that you shall always be entitled to have your right of general lien/set off on the above deposit(s) against any of my/our liability as borrower or guarantor. The lien hereby created shall not in any way affect or prejudice your lien which you shall always be entitled to exercise. Sd/- Sd/- Sd/- J.Patil Jyothi Laxmi Jyothi Laxmi Patil Sd/- Sd/- Sd/- H.Kumar J.L.Patil Hemantkumar.M. ----------------------------------------------------------- Signature of the depositor/s Ex.P-2 is the statement of Accounts for the period from 04-07-07 to 19-02-08 showing the total debit amount at Rs. 1,53,859.60 Ps and total credit amount at Rs. 1,55,000/- and the closing balance at Rs. 1,140.31 Ps. Ex.P-3 is the another Statement of Account pertaining to SOD for the period from 21-02-06 to 04-07-07 showing the repayment of loan of Rs. 41,970/- and balance at Rs. 1,20,528/- as on 30-06-07. 9. The Respondent Bank has produced (3) documents at Ex.R-1 to Ex.R-3. Ex.R-1 is the statement of Account of SOD of the complainant for the period from 21-02-06 to 04-07-07. This statement shows withdrawal of loan amount out of sanctioned loan as on (6) different occasion right from 25-02-06 to 23-06-07 and also regarding repayment of part of the loan amount at Rs. 41,970/- on (4) different dates right from 08-04-06 to 06-07-06 it tallies with the contents of complaint at Para- 4 & 5 of the complaint regarding withdrawal of loan amount and repayment of loan. Ex.R-2 is the statement of accounts of SOD pertaining to the complainant showing the withdrawal of Rs. 25,000/- out of sanctioned loan amount on 21-07-07 as contended in Para-5 of the written statement. Ex.R-3 is the photo copy of FDR No. 20030846 dt. 20-01-05 for Rs. 50,000/- invested for (12) months rate of interest at 6.75%. 10. From the material on record it shows that the complainant has withdraw/availed Rs. 1,55,000/- as contended by her in Para-4 of the complaint and in-addition to that she has also withdrawn further loan Rs. 25,000/- on 21-07-07 as contended by the Respondents in Para-5 of the written version. Thus the complainant has availed a loan of Rs. 1,80,000/- out of sanctioned loan of Rs. 2,25,000/-. It also shows that the complainant has made repayments of Rs. 41,970/- only for (4) months from April 2006 to July 2006 as stated in Para-5 of her complaint and as could be seen from Statement of Account. Except this repayment of Rs. 41,970/- she has not made any repayments of loan availed by her. 11. Admittedly the loan was obtained on security of (6) FDRs of 50,000/- each as seen in Para-2 of the complaint. The loan application Ex.P-1 also shows the security deposit of FDRs. Out of (6) FDRs, (5) FDRs at Sl.No-1 & 3 to 6 as shown in the loan application Ex.P-1 are of 2005 and the 2nd FDR is of 2006. It further shows that the FDR at Sl.No- 1 & 2 were to be matured in January-2007 whereas the other (4) FDRs were to be matured in December-2006. So it follows that the SOD loan availed by the complainant was to be repaid within the maturity period of FDRs and it appears that for the first four months the complainant was regular in repayment of loan and thereafter there was no repayment of loan amount by her. As stated earlier Ex.P-1 also incorporates the loan agreement. According to Para-4 of the loan agreement, the complainant/loanee has authorized the Respondent-Bank to apply the proceeds of the deposits/FDRs on their due dates towards adjustment of advance including interest charges thereon. According to Para-5 of the agreement, if the said FDs deposits are renewed on the due dates or before their maturity such renewed deposit shall be held as a continuing security for the outstanding account including interest etc., 12. It is not the case of the complainant that (6) FDRs have been renewed by her as per Para-5 of the terms and conditions of the agreement or she had given application for renewal of the FDRs. In the absence of the same, the Respondent Bank was justified in adjusting the deposit/FDRs in the loan account on the due dates. Statement of Account shows that the FDRs were adjusted on 14-01-08 for the non-repayment of loan by the complainant from August-2006. Over and above Para-11 of the agreement in Ex.P-1 as reproduced above, it states that the depositors/complainant had agreed and authorized Respondent Bank to have their right of general lien/set off on the FDRs against her liability as borrower or guarantor. So the contention of the complainant that the Respondent Bank without intimation has adjusted FDRs in the loan account does not stand to reason. 13. The complainant has nextly contended that the Respondent Bank has illegally charged high rate of interest. The Respondent in their written statement have contended that they have charged 1% interest on the loan amount in excess to the rate of interest given on the FDRs. Interest on FDRs was fixed at Rs. 8.5% p.a. and it was also agreed that the rates may be varied from the bank from time to time. The prevalent interest was at 9.25% and therefore the Respondent Bank has charged the interest at 9.25% p.a. from 01-02-07 compoundable with quarterly rests as agreed by the complainant. Ex.P-1 shows that initially the interest on the loan was at 8.25% and subsequently it was raised to 9.25% so we do not find substance in this contention also. As stated supra the complainant/borrower has not repaid the loan after August-2006 and the FDRs/deposited by her were not renewed and so after the maturity of the FDRS the Respondent Bank has adjusted the proceeds of the FDRs in the loan amount with interest. Under these circumstances the Respondent Bank cannot be said to be deficient in service or unfair trade practice as contended by the complainant. Therefore we hold that the complainant has failed to prove point No-1 and so Point NO-1 is answered in the negative. POINT NO.2:- 14 In view of our discussions and finding on point No-1, holding that the complainant has failed to prove deficiency in service and unfair trade practice on the part of the Respondent Bank, therefore the complainant is not entitled for the reliefs sought for. In this view of the matter we pass the following order: ORDER The complaint of the complainant being devoid of merits is hereby dismissed . No order as to cost. Office to furnish certified copy of this order to both the parties forth with free of cost. (Dictated to the Stenographer, typed, corrected and then pronounced in the open Forum on 24-11-08) Sd/- Sri. N.H. Savalagi President Dist.Consumer Forum-Raichur. Sd/- Sri. Gururaj Member. Dist.Consumer Forum-Raichur. Sd/- Smt.Pratibha Rani Hiremath Member. Dist.Consumer Forum-Raichur.